Minister of Agriculture, Food and Rural Affairs Song Mi-ryung, left, meets representatives of Korea's major food and beverage companies at the Korea Food Industry Association’s office in Seoul, Tuesday. Yonhap
Stabilizing market prices key priority, says government
By Ko Dong-hwan
The agriculture minister on Tuesday urged the country’s major food and beverage companies not to raise retail prices of their products in response to the rising import prices of raw ingredients, emphasizing that stability in the retail food market is a priority of the government.
Minister of Food, Agriculture and Rural Affairs Song Mi-ryung also said the government is closely monitoring Korean food exports to the United States and whether the Donald Trump administration will slap them with excessive tariffs, adding that much of the concerns remain uncertain at this point.
Song met representatives of 17 companies — including CJ CheilJedang, SPC Samlip, Nongshim, Samyang Foods and Ottogi — at the Korea Food Industry Association’s office in Seoul to collect their opinions. The meeting came as Washington began levying tariffs on imports to the U.S., with Trump signing proclamations on hefty duties for steel imports.
The U.S. government’s mandate initially targeted steel and aluminum, but Korean food companies expressed concerns whether the aggressive tariff measure will be expanded to target their exports as well.
The meeting also came at a critical time many of the imported raw ingredients to Korea such as cocoa, coffee, sugar and tomato paste have experienced price increases, pressuring the companies with increased production costs.
“Market prices in Korea are facing rising uncertainties right now due to the unstable exchange rate, unstable oil prices and the U.S. government’s new international commerce measures, which have altogether caused price increases for the raw ingredients our food companies need,” Song said.
She cited the prices of imported cocoa which increased to over $11,000 per ton as of Feb. 3, a 91.5 percent jump from last year. She also cited those of imported Arabica and Robusta coffee beans, key ingredients for coffee shops and instant coffee products, which rose by 58.7 percent and 28.8 percent during the same period, respectively.
Song said she understands the rising prices of ingredients are pushing up production costs for the companies. But she also emphasized the need for keeping the country's retail food prices stable.
She added she will introduce new incentives for the companies such as implementing a tariff-rate quota over a broader range of key ingredient imports — 13 in total including cocoa bean, coffee extract, sugar and orange extract — to lower their prices. She said the government will also exempt coffee and cocoa imports from a value-added tax this year and subsidize the companies with 450 billion won ($310 million) for purchasing imported ingredients.
“We have shown our planned policies to the company representatives and asked them to cooperate with the government’s goal to stabilize the country’s market prices,” Song said.
“The company representatives agreed with us, saying they will delay price hikes as much as possible and keep the hikes as low as possible.”
Song also thanked the companies for trying to lower the retail prices of their products during the Lunar New Year holiday last month by joining in price-slashing events at the country's major supermarket companies. She cited 16 companies that offered discounts as high as 50 percent on 850 products during the weeklong holiday.
English (United States) ·